US Military Paid $1.1 Trillion to Contractors That Defrauded the Government

Thursday, 20 October 2011 20:20

The Pentagon has paid $1.1 trillion to hundreds of defense contractors and their parent companies that have defrauded the government over the past ten years, according to a Department of Defense report released Thursday.

More than 300 contractors involved in civil and criminal fraud cases that resulted in judgments of $1 million or more during the last decade were paid a total of $573.7 billion by the US military, including $398 billion that was paid to contractors after judgments for fraud. When awards to parent companies are included, the Pentagon awarded $1.1 trillion to the top 37 companies that defrauded the US military since 2000.

Raytheon, for example, spent nearly $4 million to settle a civil case with the government in 2002 and $2.5 million to settle a case in 2000. Since the cases were settled, the Pentagon has awarded Raytheon's aircraft and engineering divisions a total of $1.8 billion.

Lockheed Martin paid $10.5 million in 2008 to settle charges that the company submitted false invoices on a multibillion dollar contract connected to a space vehicle program. Despite the fraud, the Department of Defense awarded Lockheed $30.2 billion in contracts in 2009.

Another $33 million was paid to 54 companies after they were convicted of criminal fraud against the government. Companies found guilty of criminal fraud received a total of $255 million during the ten-year period.

The report, which was prepared for Sen. Bernie Sanders (I-Vermont), follows a report released by a Congressional commission that found $33 billion to $60 billion in taxpayer money had been lost due to contract fraud and waste in the wars in Iraq and Afghanistan. The commission blamed the problem on ill-conceived contracting projects, lack of government oversight and "criminal behavior and blatant corruption," according to its report.